<?xml version="1.0" encoding="ISO-8859-1"?> <docID>334424</docID> <postdate>2024-12-02 11:43:38</postdate> <headline>‘Luckiest’ government ‘wastes’ budget opportunity</headline> <body><p><img class="size-full wp-image-334425" src="https://citynews.com.au/wp-content/uploads/2024/12/RICHARDC_Chris_Richardson_HERO_2024-07-02-144434_mvcn-e1733100085393.jpg" alt="" width="946" height="630" /></p> <caption>Economist Chris Richardson says the opportunity to prepare for the long haul has been wasted.</caption> <p><span class="kicker-line">By <strong>Dominic Giannini</strong> in Canberra</span></p> <p><strong>The federal coffers are set to be boosted by $365 billion off the back of larger tax receipts mainly based on luck and not policy, an independent economist says. </strong></p> <p>But the luck is beginning to run out, with iron ore prices, inflation and migration all easing, Chris Richardson says, forecasting the bottom line will be $20 billion worse off than Treasury predicts across the next four financial years</p> <p>War drove up global prices – including Australian exports – and migration increased population, both of which increased tax collection, Chris Richardson said.</p> <p>Tax revenue was also bolstered by high inflation that re-sliced the economic pie, taking more away from families, he said.</p> <p>Labor spent $104 billion since coming to office in 2022 while only raising taxes by $44 billion, meaning there was a $60 billion gap in the bottom line, he said.</p> <p>"It's a wasted opportunity, the luckiest government Australia has ever seen – at least in budgetary terms – didn't take the opportunity to get the national budget better prepared for the long haul," he said.</p> <p>Tobacco, superannuation and resource taxes were branded "dumb" to "diabolically dumb", blowing budget black holes as the years went by.</p> <p>The $20 billion hit to Treasury's predicted cash headline deficits is due to "increasingly dodgy action off-budget", Mr Richardson said.</p> <p>Off-budget spending doesn't hit the underlying budget position – such as when the government buys an asset that retains its value.</p> <p>Mr Richardson estimated the budget would be $32 billion in the red in 2024/25, almost $44 billion in 2025/26, $27.5 billion in 2026/27 and $30 billion in 2027/28 – all billions of dollars worse than Treasury predicted.</p> <p>Treasurer Jim Chalmers is tempering expectations ahead of national accounts data due to be released on Wednesday, saying slow economic growth was anticipated.</p> <p>A mid-year budget update will also be released in the coming weeks ahead of a planned federal budget in March 2025.</p> <p>"We've been up-front for some time that pressures on the budget are becoming more challenging, not less," Dr Chalmers said.</p> <p>"We've overseen the biggest-ever fiscal turnaround in a single term, turning two big Liberal deficits into two substantial Labor surpluses, and that's a powerful demonstration of the Albanese government's responsible economic management."</p> <p>Whether the federal budget will be handed down before an election is called is a point of frequent speculation.</p> <p>Dr Chalmers has delivered two consecutive budget surpluses, largely due to soaring commodity prices, with the next fiscal update expected to forecast a sea of red into the distant future.</p> <p>It adds to the case that the prime minister will pull the election trigger if he faces the prospect of having to stand by an official budget deficit.</p> </body>